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    XRAY
    Earnings call· Jun 2026(Q2 FY26)

    DENTSPLY SIRONA Q2 FY26 earnings call XRAY

    Aug 6, 2026 Source

    Executive summary

    DENTSPLY SIRONA Q2 FY26 — Return-to-Growth Plan Progress Amidst Macro Headwinds

    Dentsply Sirona continued executing its Return-to-Growth Action Plan in Q2 FY26, showing progress in customer engagement and commercial capabilities, particularly with new dealer partnerships and sales force training. While the company maintained its full-year guidance, it acknowledged ongoing macroeconomic headwinds, including regional capital equipment delays and distributor inventory reductions, which are expected to weigh on Q3 results before improvements become more visible in Q4.

    Highlights

    5

    • Operating cash flow increased to $99 million from $48 million in the prior year quarter.

    • Tariff refunds of $44 million translated to a positive $0.17 per share impact.

    • Wellspect Healthcare revenue grew 7.1% as reported to $86 million, driven by new product sales.

    • Adjusted EBITDA margins were approximately flat year-over-year.

    • Repurchased 1.3 million shares at an average price below $10 per share.

    Concerns

    5

    • Total revenue decreased 4.1% as reported, or 6.3% on a constant currency basis, to $898 million.

    • OIS revenue declined 13.2% as reported to $197 million, with a 5.7% decline adjusted for Byte impact.

    • EDS sales declined 2.7% as reported to $376 million, primarily due to lower volumes in Americas and EMEA.

    • CAD/CAM revenue was down mid-single digits, driven by lower volumes in the Americas and unfavorable price/mix in EMEA.

    • SureSmile revenue declined double digits, primarily attributable to the Americas region.

    Guidance & targets

    6
    CategoryTargetConfidence
    Net sales
    $3.5 billion to $3.6 billion
    high materiality
    High
    Adjusted EPS
    $1.40 to $1.50
    high materiality
    High
    Q3 2026 Revenue
    decline sequentially
    medium materiality
    High
    Q3 2026 Earnings
    below Q2 2026 levels
    medium materiality
    High
    Investment benefits
    increasingly visible beginning in Q4
    medium materiality
    Medium
    U.S. business exit rate
    with a plus sign
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Connected Technology Solutions (CTS)
    As-reported decline, with Equipment & Instruments flat due to declines in Treatment Centers offset by imaging growth in EMEA. CAD/CAM impacted by Americas volumes and EMEA price/mix, partially offset by APAC growth. EMEA saw some softening due to Middle East uncertainties.
    Equipment & Instruments revenue: $137M (flat YoY)CAD/CAM revenue: $102M (down mid-single digits)Imaging equipment growth: particularly in EMEACAD/CAM Americas: lower volumesCAD/CAM EMEA: unfavorable price/mixCAD/CAM APAC: double-digit growth
    		$239M-1.5%——
    Essential Dental Solutions (EDS)
    As-reported decline primarily driven by lower volumes. EMEA was impacted by distributor inventory reductions, though sell-out was consistent with expectations for dental consumables. Sequential improvement in Q2 for EMEA dynamics.
    Lower volumes: Americas and EMEAEMEA distributor inventory reduction: negative impactEMEA sell-out: low single digitsEMEA sell-in: lower year-over-year
    		$376M-2.7%——
    Orthodontics and Implant Solutions (OIS)
    Significant as-reported decline, partially due to the Byte impact. IPS revenue declined due to lower premium implant volumes in Americas and APAC, while EMEA Implants grew, led by the MIS brand. SureSmile experienced double-digit declines, mainly in the Americas.
    Adjusted for Byte impact: -5.7% as reportedIPS revenue: declined mid-single digitsPremium implants: lower volumes in Americas and APACEMEA Implants: grew mid-single digitsMIS (value implant brand): improved performance in EMEASureSmile revenue: $40M (declined double digits)SureSmile Americas: primary attributable region for decline
    		$197M-13.2%——
    Wellspect Healthcare
    Strong growth driven by continued strength of new product sales and execution, partially offset by lower inventory levels in the U.S. market.
    New product sales: continued strengthExecution by the business: strongU.S. market: lower inventory levels (partially offsetting growth)
    		$86M+7.1%——

    Operational metrics

    14
    Adjusted EBITDA margins
    approximately flatyear-over-year
    Q2 FY26

    Benefit from tariff refunds offset by decline in gross profit, lower volumes, sales mix, and incremental tariff impacts.

    Operating expenses (OpEx)
    $12Mup year-over-year
    Q2 FY26

    Increase includes FX headwind, with decrease in G&A offset by investments in sales, marketing, and R&D.

    Share repurchases
    1.3M shares
    Q2 FY26

    First share repurchases since Q3 2024, using a portion of tariff refund proceeds.

    Cash and cash equivalents
    $239M
    Q2 FY26

    Balance at the end of the quarter.

    Tariff refunds
    $44M
    Q2 FY26

    Translated into a positive $0.17 per share impact.

    Tariff refunds EPS impact
    $0.17
    Q2 FY26

    Positive impact from tariff refunds.

    EDS sell-out
    low single digits
    Q2 FY26

    Consistent with expectations for dental consumables in the region.

    EDS sell-in
    lower year-over-yearyear-over-year
    Q2 FY26

    Due to certain distributors reducing inventory levels from ~12+ weeks to ~8 weeks.

    EMEA Implants growth
    mid-single digitsas reported
    Q2 FY26

    Led by improved performance for MIS, a value implant brand.

    DS Core implementation
    4
    Q2 FY26

    Began implementing the platform, reinforcing value of integrated digital workflow.

    U.S. implant sales rep certification
    completed
    Q2 FY26

    Most experienced team members learned more in 4 days than in years.

    APAC milling systems growth
    double-digit growth
    Q2 FY26

    Part of expanding education programs and implant sales training in the region.

    Pricing changes
    no significant price increase
    since Sep 2025

    Any recent changes are minor tweaks, SKU shifts, or mix impacts, not significant price increases.

    Dental market growth
    about 3%
    current

    Management's estimate for market stabilization, aligning with competitors' reports.

    Industry KPIs

    6
    MetricValueDetails
    Tariff impact$44MUSD
    Pricing realized priceno significant price increase
    New product launch rampWellspect Healthcare new products
    FCF conversion leverage guidance3.2x
    Segment franchise organic growth-6.3%%
    Sales force commercial capacity buildall U.S. implant sales reps

    Product announcements

    2
    ProductTypeDetails
    Wellspect Healthcare new productslaunch
    DS Core implementationmilestone

    Deals & partnerships

    3
    Atlanta DentalExpansion of partnership for U.S. distribution footprint.

    Announced expansion of partnership to strengthen U.S. distribution footprint.

    Nashville DentalExpansion of partnership for U.S. distribution footprint.

    Announced expansion of partnership to strengthen U.S. distribution footprint.

    Medline SinclairAdvanced long-standing relationship in Canada, expanding capital side.

    Advanced long-standing relationship in Canada, specifically expanding on the capital side, which was not previously covered. This provides natural reach and faster product access in Canada.

    Risks & headwinds

    5
    Macroeconomic uncertainties in EMEAQ2 FY26, ongoing

    Softening demand for select areas of capital equipment, delays in investment decisions.

    Mitigation: Monitoring the situation; hoping for resolution in Q3/Q4.

    Distributor inventory reduction in EMEAQ2 FY26, ongoing

    EDS sell-in lower year-over-year, with distributors reducing inventory levels from ~12+ weeks to ~8 weeks.

    Mitigation: Management believes this is not a demand-driven trend and is gaining visibility into dynamics.

    Byte impact on OIS segmentQ2 FY26, ongoing

    OIS declined 5.7% as reported when adjusting for the year-over-year impact from Byte.

    Mitigation: Continued focus on the overall Return-to-Growth Action Plan.

    SureSmile revenue decline in AmericasQ2 FY26, ongoing

    SureSmile revenue declined double digits, primarily attributable to the Americas region.

    Mitigation: Part of the turnaround plan, focusing on re-engaging orthodontists, hiring sales force, and modernizing software.

    Increased freight costs due to Middle East tensionsQ2 FY26, ongoing

    Unquantified impact on costs.

    Mitigation: Absorbing impacts to date; will consider adjusting bottom line if pressures remain high.

    What to watch in Q3 FY26

    5

    New dealer partnership contributions

    Q3/Q4 FY26
    CurrentSmall numbers, some double-digit growth from 2 new dealers
    TargetHeavier contributions to revenue, particularly capital sales

    Why it matters

    New dealer partnerships are a key component of the U.S. commercial expansion and Return-to-Growth plan, with a typical 9-month ramp-up to production.

    And I always mention it's about 9 months before you really produce there to sell capital. And so you're bringing them on board, training them, getting their reps out there, building a pipeline and then closing. And so while we are positive and seeing positive results of who we brought on, I think that will be heavier in the fourth quarter than perhaps what we've seen in the first or second.

    Q&A highlights

    6

    Why did John Fortson join Dentsply Sirona, and does management feel the leadership team is now complete to execute the turnaround plan? Also, what are the drivers for the expected Q4 improvement?

    John Fortson was drawn by the Board and leadership's commitment to the turnaround plan and the opportunity to restore the business. Dan Scavilla confirmed the executive committee is strong and complete. Q4 improvement is expected from the timing of structural reorganizations and the maturation of new dealer partnerships, which typically take about 9 months to generate significant capital sales.

    “Yes, we have who we need to make the changes that we need to make. I feel very strong about that.”

    asked by Elizabeth Anderson · answered by Daniel Scavilla

    2 min read7 chapters

    Detailed Narrative

    01

    Return-to-Growth Action Plan Progress

    Six months into the 24-month Return-to-Growth Action Plan, Dentsply Sirona is focused on customer-centricity, improved execution, strategic investments, and strengthening its financial foundation. While acknowledging the turnaround is ongoing and not linear, management sees encouraging signs of traction, with improvements expected to be weighted towards Q4 due to investment timing and macroeconomic conditions. The company is committed to going deeper, moving faster, and taking bolder steps to improve the business.

    02

    Customer Engagement and Clinical Education

    The company is rebuilding customer engagement, investing in clinical education, and strengthening its commercial organization. Q2 highlights include bringing together over 1,000 clinicians at the Global Implant Summit and hosting the 2026 Endodontic Forum. These initiatives aim to learn from clinicians, strengthen relationships, and ensure the innovation pipeline meets customer needs. Management noted positive feedback from dentists regarding their recommitment to clinical education.

    03

    Commercial Organization and Dealer Network Expansion

    Dentsply Sirona is investing in its commercial capabilities, including a comprehensive implant certification program for all U.S. implant sales reps. Internationally, APAC is expanding education programs and implant sales training, seeing double-digit growth in milling systems. The company also strengthened its U.S. distribution footprint by expanding partnerships with Atlanta Dental and Nashville Dental, and advancing its relationship with Medline Sinclair in Canada, particularly for capital expansion.

    04

    Internal Operational Improvements and Financial Discipline

    Internally, the company is simplifying its organization, enforcing accountability, standardizing processes, and embedding lean operating principles and AI to accelerate decision-making. Financial discipline remains a priority, with efforts to improve cash generation and strengthen the balance sheet. The company repurchased 1.3 million shares for approximately $12 million using tariff refund proceeds, aligning with its capital allocation framework.

    05

    Wellspect Healthcare Performance

    Wellspect Healthcare delivered another strong quarter, with revenue increasing 7.1% as reported to $86 million. This performance was driven by new product sales, geographic expansion, and strong execution. The company views Wellspect as a model for consistent execution and has established a strategic Advisory Board to guide its long-term priorities, innovation, and growth opportunities.

    06

    Tariff Impact and Financials

    The company received $44 million in tariff refunds in Q2, which translated to a positive $0.17 per share impact. These refunds were not included in the initial guidance. Adjusted EBITDA margins were approximately flat year-over-year, with the tariff benefit offset by lower volumes, sales mix, and incremental tariff impact🌐s. Operating cash flow significantly increased to $99 million from $48 million in the prior year, partly due to tariff refunds and working capital improvements.

    07

    Macroeconomic Conditions and Regional Performance

    Management noted some softening demand for capital equipment in EMEA due to uncertainties from the Middle East conflict, causing delays in investment decisions. While the company believes it must improve regardless of market conditions, it is monitoring macro pressures🌐 like increased freight costs. EDS experienced lower volumes in Americas and EMEA, with EMEA impacted by distributor inventory reductions. IPS saw mid-single-digit declines in premium implants in Americas and APAC, while EMEA Implants grew mid-single digits.

    AI-generated summary of the company’s earnings call. Not investment advice.